Following extensive negotiations on labour law reforms among business representatives, trade unions, and government officials at the National Economic Development and Labour Council (NEDLAC), a report detailing proposed changes has been released. These discussions, which began in April 2022, have culminated in the publication of the NEDLAC Report on the Labour Law Reform Process.
Overview of the Proposed Changes
The report outlines recommendations put forward by stakeholders and the resulting agreements reached. It has been submitted to the Minister of Employment and Labour along with four draft amendment bills. These bills propose a total of 47 changes to the Labour Relations Act, 1995 (LRA), 13 amendments to the Basic Conditions of Employment Act, 1997 (BCEA), two modifications to the National Minimum Wage Act, 2018 (NMWA), and three changes to the Employment Equity Act, 1998 (EEA).
Below is a summary of some of the key proposed amendments:
Limits on Remedies for Unfair Dismissal of High-Earning Employees
A new provision is being considered for the LRA that would restrict the remedies available to high-income employees in cases of unfair dismissal. Under this proposal, reinstatement would only be granted for cases involving automatically unfair dismissals, while compensation for all other dismissals would be subject to a capped amount. This cap, however, would not apply to cases involving whistleblowing or automatically unfair dismissals.
The earnings threshold for this provision is set at ZAR 1,800,000 per annum for the period from May 2024 to April 2025 and will be adjusted annually based on inflation.
Clarification of Procedural Fairness in Dismissals
The proposed changes seek to explicitly define the procedural fairness test for dismissals. It will be stipulated that, unless a collective agreement states otherwise, an employee must be given a fair and reasonable opportunity to respond before being dismissed. This aligns with the recently revised Code of Good Practice on Dismissal and reflects the shift away from overly formal, adversarial dismissal proceedings.
Probationary Period for Protection Against Unfair Dismissal
A new Section 188(4) of the LRA is set to introduce a qualifying period for protection against unfair dismissal. Under this amendment, new employees will not be covered by unfair dismissal protections during their first three months of employment. However, a longer probationary period may apply if it is reasonable and operationally justified in the employment contract. Despite this, all employees—including new hires—will remain protected against automatically unfair dismissals.
This change is intended to encourage the hiring of young and inexperienced workers by providing employers with greater flexibility.
Changes to Large-Scale Retrenchment Processes
Several amendments have been suggested concerning section 189A of the LRA, which governs retrenchments. Notably, the Commission for Conciliation, Mediation and Arbitration (CCMA) will be granted the authority to establish rules on retrenchment facilitations, rather than the Minister.
Additionally, challenges to the procedural fairness of a retrenchment will now take place after the dismissal. This change eliminates the previous urgent application process under sub-sections (13) to (18), which allowed procedural challenges while retrenchment processes were still ongoing. As a result, employees affected by a facilitated retrenchment process will be able to take their cases directly to the Labour Court without the need for prior conciliation.
These adjustments effectively restore the legal framework that was in place before the introduction of section 189A.
Narrowing the Definition of ‘Unfair Labour Practice’
A significant modification has been proposed regarding the definition of unfair labour practice in section 186(2) of the LRA. The proposed amendment seeks to remove certain categories of disputes, restricting unfair labour practice claims to cases involving:
Unfair suspension or disciplinary action short of dismissal.
Occupational detriment related to protected disclosures (whistleblowing cases).
A transitional period of one year will be provided for public service employers, allowing disputes related to promotions to be resolved under the existing legal framework while collective agreements are being finalized.
Increase in Statutory Severance Pay
The minimum severance pay for retrenchments is set to increase from one week to two weeks’ remuneration for every completed year of continuous service. However, this change will only apply to years of service completed after the enactment of the amendments.
Expansion of the Definition of ‘Employee’
A new Schedule 11 in the LRA will broaden the scope of employee protections, ensuring that a wider group of workers—including those engaged in non-traditional forms of employment—receive freedom of association and bargaining rights. This expanded definition will also apply to Chapters 8 to 10 of the BCEA, granting the Minister the ability to set minimum employment conditions for this category through sectoral determinations.
This amendment appears to be geared toward improving protections for gig workers, such as those in ride-hailing and food delivery services.
Regulation of ‘On-Call’ and Seasonal Workers
A new provision in the BCEA will introduce regulations for workers who are required to be available for work but are not guaranteed shifts. Employers will be required to provide written confirmation of:
The notice period for reporting to work.
The cancellation notice period for assigned shifts.
Both notice periods must be reasonable to ensure fair treatment of workers in these arrangements.
Exemptions for Start-Up Businesses from Bargaining Council Agreements
To encourage entrepreneurship, small start-ups (businesses operating for less than two years and employing fewer than 50 employees) will be exempt from collective agreements set by bargaining councils. However, this exemption will not apply to companies formed through business transfers or restructures under section 197 of the LRA.
What Happens Next?
The proposed amendments still have a long legislative process ahead before becoming law. After vetting by the State Law Advisor, the draft bills will proceed through Parliament for further deliberation.
Public consultation opportunities will arise once the Parliamentary process begins. Since some amendments lacked unanimous support from business, labour, and government representatives, further debates and refinements can be expected.
Stay tuned for updates as these reforms continue to evolve.
